Biodiesel and ethanol both fall under the category of "biofuels," which describes any fuel synthesized from plant or animal matter. But that’s pretty much where the similarities end.

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Biodiesel offers a significantly improved environmental impact compared to both ethanol and standard petroleum-derived diesel. It can be used in standard diesel engines with little or not negative impact on engine health. Just splash-blend it in the tank of your Volkswagen or Mercedes diesel vehicle. Meanwhile, ethanol deserves scrutiny for its relatively high emissions, and the way it can damage engines that aren't specifically designed to burn the fuel.

In recent years, ethanol has been the target of a backlash from environmentalists and critics of government waste, who argue that the limited benefits of the fuel don’t justify the federal support it received over the last few decades. The Renewable Fuels Standard, which sets a production mandate for both ethanol and biodiesel, has recently been a target of reformers, who would like to see the standard cut to reflect the low demand and perceived declining promise of ethanol. If that happens, biodiesel production could get caught up in the reforms, with the EPA opting not to raise production targets for biodiesel in 2014.

Biodiesel can be produced from vegetable oils, animal fats or recycled food bi-products like restaurant grease, or from algae, which can be grown using waste materials like sewage. It can be sold in a variety of blends with petroleum diesel or as a pure 100-percent blend known as B100.

The cost of the fuel to consumers varies depending upon blend and location, but according to the most recent survey by the Department of Energy, the equivalent cost of a gallon of B100 was $4.13 this summer, or roughly $0.50 per gallon more than the cost of standard gasoline—or $0.63 more than diesel. The added cost brings the benefit of about a 50-percent reduction in greenhouse gas emissions, according to a 2010 study by Argonne National Laboratory.

The biodiesel industry is currently targeting 1.7 billion gallons of production for 2014, but the EPA’s proposal is to keep production in line with 2013’s levels: 1.28 billion gallons. Maybe ethanol has given all biofuels a bad name, dragging biodiesel down with it. The biodiesel industry claims that an unfair association is to blame for the EPA’s diminished support for the fuel.